Chapter 43 - Remedies Flashcards
Damages
Purpose of damages is to put the victim in the position they would have been in if the contract had bee properly completed and performed by the defendant
Difference between Expectation loss and reliance loss
Expectation loss is the normal measure of damages for the breach of contract.
Reliance loss is the wasted expenditure.
Loss of a bargain
-Idea is to place the claimant in the same financial position, which can be assessed in a number of ways:
-Difference in value between goods or services required in the contract and those actually provided, Bence Graphics International Ltd v Fasson UK Ltd
-Loss of profit, Victoria Laundry Ltd v Newman Industries Ltd
-Loss of a chance, Chaplin v Hicks
Reliance Loss
-This is the expense incurred by a claimant who relied on a contract being performed. A claimant may be able to recover expenses they may need in advance of a contract that has been breached.
-Seen in Anglia Television Ltd v Reed
Restitution
This is a repayment of any money or other benefits passed to the defendant in advance of the contract that is breached.
Nominal Damages
-If no loss is actually suffered but there is a breach, the court may award nominal damages.
-Seen in Stanford v Lyall
Speculative damages
-The courts have been careful to avoid granting speculative damages
-Seen in Addis v The Gramophone Company
Causation
-Losses may have been foreseeable at the time of making the contract
-Claimant must prove the breach caused the loss. But for test
Remoteness of damage
-This established which losses can be the subject of compensation
Test for remoteness of damage
-Set out in case of Hadley v Baxendale
Is in two parts:
1 The objective test: What loss is a natural consequence of the breach?
2 The subjective test: Based on specific parties when the contract is formed.
Test has been developed in case of Victoria Laundry Ltd v Newman Industries Ltd
Mitigation of loss
-The injured party must take reasonable steps to minimise the effects of the breach.
-Seen in British Westinghouse Electric v Underground Electric Railways
Liquidated damages
Where the amount of damages has been fixed by a term in the contract
Rules for determining the difference between genuine liquidated damages and a penalty
Rules Set out in Dunlop Pneumatic Tyre Co. v New Garage and Motor Co.
-An extravagant sum will always be a penalty
-Payment of a large sum for failure to settle a small debt is probably a penalty
-A single sum operating in respect of a variety of different breaches is likely to be a penalty
-Wording used by the parties is not necessarily conclusive
-It does not matter that actual assessment of the loss was impossible before the contract
Prohibitory Injunction
A court order instructing someone not to do something
Mandatory Injunction
A court order requiring a party to do something
